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Why Bob Pittman Is Putting His Time (and Money) Into Clear Channel

A Digital Media Investor Goes Back to His Old-Media Roots

LOS ANGELES (AdAge.com) -- Bob Pittman is going back to his roots. The former chief operating officer of AOL Time Warner, cofounder of MTV and onetime head of MTV Networks got his start in media as a radio programmer in markets such as Chicago, New York and Pittsburgh. Since then, however, he's forged a career as an innovator and investor in digital media. Why, then, would he return to his old-media roots, even putting his own money in the game?

Bob Pittman
Mr. Pittman will be working alongside Clear Channel Radio CEO John Hogan to determine how to maximize the company's ongoing digital strategy. Despite its local focus on its nearly 1,000 stations, Clear Channel has made significant strides in recent years to establish itself as a major player in national streaming radio through sites and mobile apps such as iheartradio. The company has also made strides in teaming up with artists and labels for exclusive music programming partnerships and premiere strategies through talent such as Premiere Radio Networks host Ryan Seacrest and Z-100's Elvis Duran.

It was precisely that dual focus that Mr. Pittman cited as a reason to return to radio. "I can't think of another company that has national reach and local execution. This company is built from local up. I'm encouraged by where they are," he told Ad Age.

And despite years of revenue losses that led to the company divesting dozens of radio stations, selling its TV division and going private in 2006, the radio group is showing signs of improvement. Just last week, the company reported that radio revenues increased 5.7% during third quarter, to $743 million. The radio ad industry as a whole has also seen a resurgence in 2010, with two major quarterly gains during the first half of 2010.

Still, Mr. Pittman thinks Clear Channel has even more untapped potential with the music industry. "We're not doing as much with the record companies as we could be doing. There's so much more that can be done, and I've had wonderful relationships with the record industry and spent a great deal of my life on and off with them. The folks at Clear Channel have wonderful ideas too, and they're making them happen."

Michael Kassan, chairman and CEO of media strategy firm MediaLink, called Mr. Pittman an "inspired choice" for his role at Clear Channel and considered his appointment and personal investment in the company to be a validation of the radio industry as a renewed place for innovation.

"He has demonstrated a great ability to look over the horizon. I think it's time all industries take a note from this," Mr. Kassan said.

Clear Channel is also still actively searching for replacements for two of its most senior positions. Mark Mays, current chairman and CEO of Clear Channel Communications, announced in June that he would step down from his CEO position by year's end or whenever the company was able to name a replacement. The company is expected to be interviewing only external candidates for the position and is open to hiring someone who could work outside of Clear Channel's corporate headquarters in San Antonio, Texas. Also open is the company's president of online music and radio, after Evan Harrison announced he would leave his role at year's end to pursue other opportunities. Mr. Pittman will not be filling either role in the interim but instead advising Mr. Hogan on digital strategies.

As for his personal investment in the company, Mr. Pittman said he was contemplating starting a new private equity fund before ultimately choosing to invest and take a more active role in Clear Channel. He is still acting as a founding member of the Pilot Group, a private equity firm that has made investments in companies such as Thrillist, OTX Research and Next New Networks and Zynga.

"I decided I'd rather find one company I could really add a lot of value to and add one investment instead of multiple partners," he said. He declined to give monetary detail about his minority personal investment, saying only, "It's small by fund standards but larger by human being standards."

Mr. Pittman was recently cited by the Association of National Advertisers' Bob Liodice as one of the 10 marketers who transformed American culture.